KENNETH BACON: You all know Deputy Secretary Hamre. He is down here with a team of Y2K experts, to bring you up to date on our latest planning for the Y2K changeover. And he will take questions. And then he has to go and will leave it over to Admiral Willard and others, who are down here with him.

Dr. Hamre?

DR. HAMRE: Well, good morning to everybody.

The front -- that is the message: We're ready. And I'll give you a bit of a highlight about what we have done.

We had our last session yesterday with the department. We meet on a monthly basis. We have -- every one of the defense services, as well as the defense agencies -- that meet on a monthly basis. We do this with the DOD IG present and with the General Accounting Office present. We have representatives from each of the oversight committees from Congress. And every one of them has been hearing the same thing now for the last six months.

And we're ready. We anticipate absolutely no problems in the Department of Defense. And we will talk about what we have done. And I will also ask to have Admiral Willard, who is with the Joint Staff, who has been spearheading the work of the Joint Staff, to speak briefly to you about what they have been doing, because this is a war-fighting issue for us. This isn't a computer geek issue; this is a war-fighting issue.

As we said before, rarely does a military organization know precisely the time and the date and the place when the enemy will attack. In this case, we did. And we had 18 months to get ready, and we're ready.

I will also ask Pete Verga to speak to you about the plans that we have made and the preparations for having representatives from Russia at a center, where we will together, through the New Year's period, be watching early-warning information to make sure that there is no misunderstanding in terms of our early-warning systems. So we'll talk about that briefly, too.

I am going to talk to you about, first of all, the mission-critical systems. These are the systems where, if there were failure in any one of them, we would not be able to execute our mission, or we would have serious disruption. All together we had 2,101 of these systems throughout the department. Eighteen months ago, we only had 566 of them ready and fixed.

And this red line shows you the progress we made. As of yesterday, we had only two that were not ready. We actually had three, but the third one got fixed yesterday. It was for the M1 tank. And all tanks had been fitted except for one that was in overhaul, and we dropped the turret back yesterday and put in the tapes, and it's ready.

The two that are remaining, they're both at -- I think the next chart actually shows -- yeah, these two systems, these are both intelligence related. They're at the National Imagery and Mapping Agency. Both of these are internal systems. They're used to schedule the work product of the other systems. They don't touch the public in any way. And by public, I mean our war fighters. So it doesn't -- and these we were able to book their work for the next six months, and that's all been prepositioned. So anything that we need to do with these two systems has already been in the can, as it were, and will be operational for the next six months. And they're scheduled to be fixed in January. So we don't think we have a problem at all. Those are the last two that are remaining.

Okay. I should say we've got about 5,500 non-mission-critical systems, and those are ones where if it fails, you know, you have to go back to some other method. You know, largely they're bookkeeping things, things of that nature. And we have about 10 of those that will not be fixed. But those aren't anything we're really worried about.

Okay. So we're ready, and there is -- every one of our war-fighting missions we are ready to undertake, and we're not going to -- and I'll have Admiral Willard speak briefly about the testing that we've undertaken. All of our nuclear systems, all of our nuclear systems are ready. And that's everything from custody of nuclear weapons to the early warning systems to the positive command and control systems. Everything is ready and has been tested.

These are what are called the high-impact programs, but that's where we touch lots of Americans. And, for example, our military hospitals, every one of the 300,000 items of equipment and supplies that we use in our military hospitals have been checked. We have also gone back and our health care folks have gone back to the suppliers. We've moved to what's called direct vendor delivery, where we no longer have warehouses that stock medicines, for example. We buy them for what we need the next day. And so we've had to go back into the supply system and from the vendors to make sure the vendors are ready, and we're confident that we're ready for that.

Our retiring annuitant pay is another one, but all of our payroll systems have been checked. And in this case what we've done as a check is from the first sergeant in a company filling out a leave and earnings statement thing, to DFAS, to the Federal Reserve, to the Treasury Fed, to the bank, to the individual bank and the allotment. And we've tracked it through that whole string multiple times to make sure we'll be okay. And we've actually pre-positioned some payroll tapes just in case, as a backup. But we'll be all right. People will get paid.

Let me, if I may, rather than my speaking to the end-to-end testing, I'd like to ask Admiral Willard if he would join me, as well as to talk about the contingency plans in the command centers. So, Admiral Willard, would you --

I was asked to join the Y2K process a little more than a year ago, for purposes of operationalizing our approach to year 2000. And by that it was to take systems that had undergone Y2K remediation and test them in a war-fighting environment. We did that through a process that was termed the CINC or unified commander operations evaluations.

And it began with an identification of our war-fighting missions, the assignment of the tasks against those missions, and then architecting the series -- the systems that support those war-fighting tasks, from headquarters to the weapons system, or from headquarters to shooter. And we then exercised those systems, synchronizing clocks into the year 2000, to assure ourselves that the remediation process that we had undergone had worked.

And we have completed all of our operations evaluations against many hundred of war-fighting tasks successfully. And we've encountered very few failures, and those failures that we did experience were very minor in nature. And that lent a great deal of confidence both to us overseeing the process, to the unified commanders, and to the services that were by and large responsible for those systems' confidence in the remediation process that we had spent so many years undertaking.

So that was really the end-to-end testing -- again, a headquarters-to-shooter view of our systems architectures, and then testing them in what we termed a year 2000 environment, meaning that the date functions were scrolled into the year 2000 and tested against several dates that we considered to be the risk -- the vulnerable dates for Y2K.

Beyond that, we have taken a look overseas at our key installations, and virtually all of the Department of Defense's installations, both inside and outside the continental United States. My focus was on presenting Dr. Hamre with a view of the host nation support services to our installations and our degree of confidence that our installation commanders could complete their war-fighting missions and that our overseas forces could complete theirs, given the state of the world, as far as year 2000 is concerned.

That is an ongoing process that hasn't stopped. We continue to utilize all of our intelligence sources, assessment teams that have gone overseas and made inquires for us, as well as the level of knowledge of our installation commanders regarding where -- what their status is, in terms of host nation support, in the form of power, communications, transportation, several other factors -- in fact, 15 areas that we truly focused in on.

Lastly, we have, in continuing to view the world and its status, established for the unified commanders and for our forces in CONUS the areas that we consider to be the more vulnerable, so that we can we remain focused on those as the century rollover occurs, and be prepared to assess whether the year 2000 is becoming truly an issue or not.

Are there any questions that I could answer?

DR. HAMRE: Why don't we wait till -- let's get through, if we could, to the very end, and then we'll field some questions, if we could.

ADM. WILLARD: Sure.

DR. HAMRE: Let me just say every -- we have contingency plans in place. Every commander of every organization knows exactly what he would have to do in his exercise, that he or she has exercised it. They also know the ground rules for what they are allowed to do and what they need permission to do if there is a problem in their community. And we have worked through all of that. And we have in place the procedures here in the department, if we do receive requests. We'll talk about that in a moment.

We do have here in the Pentagon -- we of course have a regular command center that's operational 24 hours a day. We'll be augmenting that, starting on the 28th of December, and it will run through till the 7th of January, with an additional augmentation team for any Y2K problems that'll be coming up.

I wonder if I could ask Mr. Verga to join me to talk about what we have done at the Y2K Strategic Stability Center. This is where we are working side by side with Russian officers for monitoring early warning. Pete?

MR. VERGA: Thanks, sir.

I'm Pete Verga. I work Y2K issues for the undersecretary of Defense for Policy.

The Russia program was really a five-phased program. The Y2K Center for Strategic Stability has been the one that's gotten the most coverage. We also did some technology management assistance to the Russians, to help them fix their systems to avoid problems. We ensured that the special communications links, the hot-lines that we have with the Russian government, were Y2K-compliant. And those are in fact ready. We have actually put in some backup systems just in case, for some unforeseen problems.

We have done a lot of work on the Nuclear Stockpile Security in Russia. And we have helped them to provide them with modern equipment, Y2K-compliant alarm systems; some consequence management equipment, in case there should be an accident. And that equipment has actually been delivered, and some of it is still on the way.

We actually -- we have established the Center for Y2K Strategic Stability in Colorado Springs. It is being operated by the United States Space Command and will provide an opportunity for Russian officers and U.S. officers, sitting side by side, to watch a common display of missile warning information so that there will be no ambiguities in what's happening during this period.

The Russians will be arriving on the 22nd of December. We actually have a Russian delegation in Omaha right now -- Nebraska -- doing some final negotiations on numbers of people and some very minor things. But they are scheduled to be here on the 22nd. The center will begin full operation on the 28th, will run about through the 7th of January or so, as planned right now, could be extended a little bit longer if the situation warrants.

We don't expect any problems, but we think this is a good opportunity to be able to share that information. It also is a precursor to something which is called the Shared Early-Warning Initiative, which we are working with the Russians on for the long term, where we will in fact have shared centers in Moscow and the United States to share early-warning information, to prevent any ambiguities.

The other part of the Russia program has been some work on nuclear forces command and control, which the United States Strategic Command has been working with the Russian Strategic Rocket Forces, to ensure that there is no ambiguities in the command-and-control system. We have 100 percent confidence, as Dr. Hamre said, in our side. And we are as confident in the Russians. They have given us assurances that they'll be ready on their side.

Thank you.

DR. HAMRE: Let me now go to the last chart, if I may. And this is your typical DOD chart, you know, wiring, but what I'm trying to show you is how we're going to be feeding into the overall federal government response program, if there are problems. Of course, each of the services has -- they will be monitoring their respective installations and networks and facilities and equipment. They will be reporting up through designated Y2K cells up into the Joint Chiefs, the Joint Staff, National Military Command Center structure.

As I said, we have created a special Y2K augmentation cell. It will be operational, as I said, for that transition period from the 28th through the 7th of January. They will be reporting to Secretary Cohen and myself, as well as to the chairman and the vice-chairman, should anything happen. And we will then feed into the White House. There is a designated command center for Y2K. You've seen John Koskinen's work, and there will be that center. There will be briefings provided by the ICC center, and I think we will also have supplementary briefings during this period, so that we'll be glad to provide what information we do have. We actually think we're going to be fine, but we'll try to give you as much insight as we can on what others are asking of us.

I'd like to point out Bill Leonard, who is here -- excuse me -- Curtis -- I got a mental block -- Bill Curtis, who has been the coordinator for all of our Y2K work. Bill, thank you for everything that you've done. And if there are any specific technical questions, I'd please ask you to talk to Bill.

Thank, I think, ends the discussion, so why don't we open to questions.

QAn easy one. What is the cost to get DOD compliant?

DR. HAMRE: We think it cost us about $3.6 billion. And that's -- it's very frustrating to say that we had to spend $3.6 billion. I remember talking to a fairly senior chief information officer from a major corporation in America who was complaining that he had to spend $400 million, and when his CEO jumped him about it, he said, "I know it's a waste of money, but you have to do it to save your company." (Laughter.) And that's -- you know, and that's exactly what we had to do. We could not stand the consequence if we had not spent the $3.6 billion. In the process, we have much, much better positive control over our information systems. So we've gotten some good out of it, but we had to do this no matter what.

QAs you view other militaries around the world, is there any transparency in how other nations and other militaries are doing, our allies, our enemies, our --

DR. HAMRE: Yes. Let me ask Admiral Willard to field that question, if I could. And I'll add just something at the very end.

ADM. WILLARD: There has been dialogue periodically between the U.S. Department of Defense and the Russian Ministry of Defense. We have worked with the Russians in sharing our processes with regard to making ourselves compliant. Likewise, we have taken our processes to Belgium, shared them with our NATO partners. And there has been work ongoing between NATO and the U.S. in terms of their state of compliance and our assurance that that connectivity is made.

So the answer is, yes, that particularly with our allies, there is a degree of transparency insofar as the open dialogue that has been ongoing for the better part of this year.

QBut what you're not answering and, because I guess it's politically sensitive, is: Do you think anybody comes close to the United States in being as ready? Are there many countries that are woefully inadequate as they approach this? Do you really have a handle on where the Russians are? I mean, I know you have helped them, but -- so?

ADM. WILLARD: Well, we think that there are some countries, the United Kingdom in particular, that are Y2K-compliant. And we have regarded them for some time as very strong in that regard. There are other countries like that.

And I think we have a level of knowledge of where vulnerabilities might be, and we would monitor those. But I don't think it would be appropriate to get into the details of that.

QAdmiral, to step further on the same issue, what about NATO, period? You talked about Great Britain; what about the rest of the NATO allies?

And then what about China and the rogue states? What's the intel on their readiness?

ADM. WILLARD: In terms of NATO, we have worked with NATO to some detail, on their overall state of testing and compliance. And there have been assurances given, from the commander of NATO to Secretary Cohen, establishing that our NATO partners are Y2K-compliant or have contingency plans in place to cover any shortfalls that they may have. The fact is that in the key areas of concern, NATO -- our NATO partners are considered to be in pretty good shape. They have -- there are select countries within Europe and the Mediterranean region that we watch for particular vulnerabilities, and because there is an interrelationship between many of those countries, the national infrastructures have actually had more of our attention than the military's and their ability to achieve compliance per se.

QChina and the rogue states --

DR. HAMRE: I think we've had a lot of discussion with our NATO allies, and so I don't anticipate significant problems. Of course, many of them operate U.S. equipment, and so we have been working with them to make sure that they had the fixes that we need to put in our equipment. So I think from the standpoint of our interoperability in places where we're working side by side today -- Kosovo, Bosnia, places like that -- we're going to be fine.

As to the rogue states, I think you can anticipate there are going to be some problems in those countries. Are any of them of the nature that's going to create a military quality crisis? We don't think so. Most of these countries have a high premium on positive control over their military establishments, and so we don't anticipate that there's going to be difficulties.

For example, with Russia, they have valued control over their armed forces more highly, probably, than anybody in the world, and they don't default to "off," you know, when the computers go down. They have more redundant backup ways to communicate and control their forces than we do. So we don't think that there is a lack of coherent control over military establishments, even with the rogue countries.

QSo where you see vulnerabilities is in national structures --

DR. HAMRE: Yes. I think you --

QAnd what does that mean? Infrastructure --

DR. HAMRE: Where you are likely -- where we are likely to see failure around the world, it's going to be in the -- in kind of the classic infrastructure -- power, water, waste water, things of that nature. And there it's directly related to how mechanized and automated the control systems are. Most countries still have manual intervention for most of their infrastructure. And manual intervention is going to be fine, and they'll find ways to work around that. It's probably places, like the United States, where things are so automated we have forgotten how to do it, you know, by hand, that are going to have problems.

If you were to draw a line, south of the equator is more likely going to have problems than anyplace in the world -- but they have better coping skills, to.

QBut how about in such areas as Naples and Gaeta? How would that affect the 6th Fleet?

DR. HAMRE: We actually have surveyed, and they have been talking to their community, and we don't anticipate significant problems.

QAre there any countries where there are American bases, or forces, that you don't have enormous -- that you don't think may be fully compliant and that could cause problems for American bases, in terms of the support mechanisms?

DR. HAMRE: For us, that crucial time was -- we had a meeting in October -- the end of October, where we said, "This is the time where we are going to have to move things around to supplement local infrastructure, if necessary. And it was the uniform opinion of all of the services, as well as the CINCs, that we have no problem anywhere that required that we move power generation or water purification or anything. So I think we are going to be fine, from everything I understand.

QJohn, could you give us an outline of the guidelines you have given to local commanders, both domestically and overseas, in terms of assistance to communities?

DR. HAMRE: Yes.

First, every commander knows that they are authorized to use resources under their control, if it's required for the immediate safety of life and property in their community. So if a hospital goes down in a town in America someplace, that local commander is authorized to use trucks, for example, to help transport people to a nearby hospital or a nursing center, for example. So that is very clear, and every commander understands that.

The ground rule, of course, is that you are not allowed, in doing that, to eat into your ability to carry our a war-fighting mission, if you have to undertake that. Anyone who is currently involved in an immediate operation that involves the safety of the government' continuing operations -- for example, supporting the president of the United States, supporting our ongoing intelligence operations, supporting ongoing military operations -- they may not divert any resources without getting the permission of the secretary of Defense. Any organization that is within 60 days of being mobilized for a war contingency, they would need the permission of the chairman of the Joint Chiefs before they can use any resources; that is, consume resources that they would otherwise need for that mission. And then beyond that, then there is a series of priorities -- safety of the country, for example; to support any operations at the federal penitentiary system; air traffic control, and things of that nature. There is a gradation of priorities all laid out and exercised, and we've gone through that process here in the department.

QWhere are you going to be on New Year's Eve?

DR. HAMRE: Well, there seem to be two classes of people. There are those that have a wild, fun time on New Year's Eve, and then those that are bored to tears and have a hard time staying awake till midnight. And I've always been in that latter category. But this New Year's Eve, since I have a different -- (inaudible) -- I may come in here, but I'm encouraging people not come in here. The one thing I don't want to create is a story with 500 cars in the parking lot at the Pentagon, and then you-all report that the Pentagon is worried and working overtime. We're not worried. But I'll probably be here. (Laughter.)

QTwo related questions, one on time and one on days. I mean, we think of the Y2K rollover as being at midnight, but in fact the military work on Zulu, so it would seem that the rollover is earlier than that. I'm not quite sure what time the Russian strategic rocket force uses. Is it Moscow time or they have adopted Zulu? When, actually, are the rollovers?

And secondly, Admiral Willard mentioned, in talking about the testing, end-to-end testing, he said he tested against several dates that were considered Y2K vulnerable, which implies that there were several days as systems come on which come on infrequently. Could you elaborate on both those?

DR. HAMRE: Sure. Bob, why don't you speak to the --

ADM. WILLARD: Just in terms of the dates, there were actually four -- there are a number of dates that were of interest to us. There were actually four dates that we synchronized time functions of systems to test them originally, 9/9/99, September 9th, being one of them. And very early on in our testing process, it became apparent that that was not going to be a factor, and we dropped it out. The remainder are the century rollover and the upcoming Leap Year, specifically the 28th of February to the 29th, and 29th to the 1st of March, because that is handled uniquely as a century rollover as well. So there are actually -- we'll actually have an opportunity to see whether leap year will be a problem here soon. (Soft laughter.)

QSo you had three, three, not the last one, too?

ADM. WILLARD: Those were the three that in the op eval end-to-end process we tested to.

QYeah.

ADM. WILLARD: -- were those three dates: one, the century rollover, December 31st to the 1st --

QOkay. So it was four when you began --

ADM. WILLARD: We began with four, and we dropped one out of the process.

DR. HAMRE: Nine -- you know, September 9th of '99.

But just now to address the other question, the Department of Defense is interested in every time zone. You know, we have people everywhere, and we have forces, and allies that we work with in every single time zone. So we start monitoring the year 2000 rollover at 7:00 in the morning. That's when it first hits American Samoa. And we actually have a process laid out. We'll be looking at every single time zone, with reporting coming in from every time zone.

I don't know if the Russians centrally synchronized to Zulu or Moscow time or whatever. We will of course be watching them through our own means, but they will have their own methods, and I'm not personally aware of how they synchronize if they synchronize to a central clock or they have it centralized to Zulu, or if they just do everything local.

QJohn, I was talking to Mr. Lieberman yesterday, the IG auditor who's been following your effort, and he said it was nothing short of miraculous the progress the DOD has made in the last 18 months addressing this problem. Would you agree that it's somewhat short of -- I mean, short of miraculous to monitor, to marshal all these resources and intellect on the problem?

DR. HAMRE: I think it was nearly miraculous. First of all, for this one organization -- of course, we do pretty good when you realize it's a war. And when we were asked to go to Kosovo, you know, in 10 days we had air ops working out of 15 different bases, the bombs were there, the maps were there, the people were there, the fuel was there. You know, we know how to do this.

It was hard getting everybody focused that this was about war-fighting. This was not about computer technology, this was war-fighting. And once that happened -- and I really have to say that most instrumental was when the Joint Chiefs -- when the chairman got on board, when he got the CINCs committed to it, that's when there was energy in the system. And it did happen. We turned things around. And it was, as I said, only 18 months ago when only 25 percent of our mission-critical systems were fixed, and they're all fixed now. So, it did involve miracles, but we do miracles. Rarely, but we do them every now and then.

Let me come to Ivan, and I'll come back.

QAs you made you way over the past 18 months throughout our government, give me your considered opinion, how ready is the rest of the United States government as we close to Y2k?

DR. HAMRE: Well, I have attended four or five things during the last year, and of course it's impossible for anyone to know with the same kind of confidence that we have of our own systems. But when you ask them, "What have you been doing?" they all basically say the same things or they have the same sense of how they testing, organizations, the sort of testing protocols they went through, the outside reviewers that they brought in to look at it. Since most people have really talked about it with the same sort of discipline and the same sort of confidence, I think things are going to be fine. I think we all feel that the infrastructure that the country depends on is largely going to be okay. We clearly could have some point outages that we don't know of now.

I think as John Koskinen has said, the biggest problem is going to be the normal outages that happen on a day-to-day basis will be interpreted on that day as being Y2k-related, and we'll just have to watch that and try to be careful about not misinterpreting.

QSo the toilets will flush.

DR. HAMRE: The toilets will flush, I promise you. (Laughter.)

QGoing back to the question of the near-miracle --

DR. HAMRE: Yeah. (Laughs.)

Q-- is it correct that at one point, Secretary Cohen was so dismayed about the pace that he was threatening to withhold funding for new communications systems, the development of them, unless people started getting on-board the Y2K bandwagon? And were there any other negative incentives that you had to use to get this process rolling?

DR. HAMRE: Well, he told me he'd fire me if we had problems. (Laughter.) And that kind of motivated my thinking. (Laughter.) Yes, we -- at one time we did indicate, and it was this last January, it was December to January when we were counting on a big increase in fixed systems. And at that stage, he did say, "I will disallow anybody spending money on anything else in their information technology systems if they're not Y2K compliant or meeting the schedule that we had for the fixes." That also made a difference. The system really snapped to, and we didn't have to execute on that threat, but it was very clear to people that this now was a matter of personal responsibility at every level. It wasn't just him holding me responsible, but I in turn held others responsible. And the whole building, I think, felt that personal responsibility was on the line, and that's what made a big difference.

QThere were no other negative incentives?

DR. HAMRE: No, it was just -- it was basically saying, "You know, you all are going to make this work." And I am willing to take some fairly extraordinary steps, if necessary. We looked at other things and, frankly, did not have to do them because just the system was starting to work.

QWhat's your worst case scenario?

DR. HAMRE: Well, I suppose the worst case scenario is that we had not foreseen problems in some of the countries where we have our forces deployed and that they may be misunderstood at the time.

We did a couple of exercises. And one of the things that we learned, I think that surprised me is that we really should not immediately react until you get a real lay of the land, if a problem comes up, because we could use a lot of our muscle power -- burning up spare parts, burning up fuel, burning up people's time -- responding to what isn't a central problem, if we overact. And so we needed to put in place the discipline to stop and think carefully.

If there are going to be problems that would affect us, it is going to be in countries where we have our troops deployed; not that would affect our war-fighting ability -- that we don't think is at risk -- but really it's more the support infrastructure that our families use. And here, but I still don't anticipate this to happen, but that I think is the thing we most worry about.

We really do not worry about Russia, missiles going off, or early-warning systems getting false reports or anything like that; we're confident that will not be the case.

QWhen you said misinterpret, did you mean that a Y2K glitch occurs in Country "X" and there is the danger of misinterpreting that as some military move, or there is simply a danger of --

DR. HAMRE: Probably not that it's a military move but more the case that it would be misinterpreted as Y2K, when it may not be Y2K, and then we would respond too quickly, or that all of a sudden, there is a Y2K problem and somebody interprets that as Y2K and a cyberattack, you know. And all of us, we ought to just be careful to do diagnostics in the early hours, rather than just try to overreact in the near term.

Let me come back here; then I'll come back.

QI want to go back to the Zulu question for a minute. I mean, are all of your war-fighting systems going to go into the year 2000 at Zulu time? And are you doing anything extraordinary as far as information assurance on this date rollover as well?

DR. HAMRE: Let me ask Admiral Willard to talk about the clocks and the systems, and then I'll talk about the information assurance issue.

ADM. WILLARD: The systems will operate as they normally operate. We've made no extraordinary moves to synchronize all of the clocks in Department of Defense's systems to roll over at the same time. Rather, as the century changeover moves around the world, our forces' systems will be affected by that. Does that answer your question?

QI thought that at least in some of your circumstances, like in Colorado Springs, you make this date change at Zulu time. Is that incorrect?

ADM. WILLARD: In order to -- I don't know if, Pete, you want to answer to it?

MR. VERGA: Typically communication systems are normally synchronized at Zulu. In other words, the clock time on a message is the same wherever it is around the world. So communications systems are done that way. Supporting infrastructure systems are what we're worried about, and those generally operate on local time. The date stamp is not the critical issue, because that's just a clock function. My PC is on local Washington, D.C., time. It's going to be wherever it is. So it's the infrastructure ones are the ones that I think we're more -- and again, I wouldn't say concerned about, but that we've looked at, because the rest is not a system-level functionality, it's a marker that's put on things. So Zulu is going to happen the same time around the world everywhere, but the time differential in the infrastructure systems will be the local times around the world.

QWell, what, then, is the time critical for the Russian early warning systems? Is that Zulu? Do we know what time that will be?

MR. VERGA: I would say, you know, that Russia's got 18 time zones or something -- I'm not sure. There's a lot of time zones in Russia. The issue, again, is not the time that it occurs within the system itself, because we don't expect problems within systems themselves, we expect problems within infrastructures that would, for example, power a radar. That's going to be at the local system. And that's why, if an early warning radar in Russia fails, we think it would be because the power went out, which is a local time zone problem, and not because there's a fundamental problem within the system, because that's easier to address.

DR. HAMRE: And Mick, just to say that's why we're standing up -- the operation out of Colorado Springs stands up on the 30th, so that we have a run-up time.

QAnd out of this $3.6 billion, how much specifically did the U.S. spend in assisting Russia in getting their systems to be Y2K compliant?

MR. VERGA: Without it being an audit quality figure, the nearest I can come to right now is about $10 million. And that was in what we'd call cooperative threat reduction dollars, which in many cases we would have spent anyway, because it's in our interest to have the nuclear stockpile surety issues in Russia being taken care of. The rest is -- how much does it cost to travel people over to the --

DR. HAMRE: But we're -- you ought to say they've not asked, you know, us to redo their computer systems. You know, that's been very limited -- the areas where they've been willing to work with us.

QIf I could just follow up, Mr. Secretary, with something you said, you mentioned cyberattack. What is the anticipation that someone will try to use Y2K as an effort to launch a cyberattack, not only against our systems but other systems?

And one other question: Why are you so confident that other militaries -- the Paks, the Indians, the North Koreans, the South Koreans -- that there will be no military problems involved with Y2K? Do you have assurances from those countries, or are you just going on good faith here?

DR. HAMRE: Well, let me take the first. There's of course a lot of speculation that there might be cyberattacks coming at the time, either by -- because it's opportunistic, because people are going to be confused or preoccupied with other things, or that there is some millennialist sort of fervor that people would use this as a media for that.

There is certainly discussion in the hacker chat rooms about Y2K. It tends more to be of the nature of pre-positioning viruses so that they go off at midnight on the 31st. We're monitoring all of that, and we have virus protection systems in all our networks now. And there have been a few cases where we've been catching things, but most of the time we don't see that much, frankly.

We're apprehensive enough about it that we've put special watch procedures in place. Now during the last 18 months, independently, we've gone to a whole system of watch centers and intrusion detection devices and monitoring networks for our computer network systems. So each of the services has network monitoring stations, and we have a centralized network monitoring facility just over here on Courthouse Road in Arlington. They will be standing up extra folks to be on alert.

And as I said, I think the larger problem that we would confront would be pre-positioned viruses or things of that nature. And that we're catching on a day-to-day basis. We're working with the virus detection companies. They have engineered products for us that let us catch the things that are currently circulating.

So we think that while there might be some, we're aware of it and ready for it, as ready as we can be. We don't, you know, anticipate anything really dramatic or unanticipated at this stage, because we are watching.

QAnd your confidence in these other militaries --

DR. HAMRE: Confidence in the other militaries is -- it varies in the degree of conversations we've had with people. Some countries are very open to deal with us. You know, we've had virtually, you know, monthly meetings with the U.K., Canada, Australia, New Zealand, Germany, you know, some of the others, where we've been very, very actively involved.

For other military establishments, especially in NATO, it's been more formalized, but I think that there's been a discipline to it. So we're fairly confident about those countries.

For a lot of the other countries, frankly, it's not nearly the same depth of awareness, and it's been more the focus of our government-to-government exchanges, not so much military-to-military exchanges. For those countries who we depend on as either coalition partners or active allies, we've had active, ongoing dialogue, and we're fairly confident we won't have problems there.

Q (Off mike) -- for example, in India/Pakistan, you know, the tensions that are still ongoing there, or in the North Korean -- or the borders of the Korean --

DR. HAMRE: I think we -- our confidence extends to having sober discussions with people about not doing anything, you know, crazy.

But remember, this is -- you know, millennialist fever is very much -- I hate to say it's a "Christian" worry. You know, Buddhists don't think there's anything special about the year 2000. Muslims don't think there's anything special about the year 2000. It isn't -- to them it isn't year 2000, you know, so it --

QBut they use computers, I mean.

DR. HAMRE: Well, no, they use -- they use Western computers, but there isn't that same sense of paranoia and alarm, and you certainly don't have the millennialist fear in other countries that we seem to have here in the States. So, again, we've taken the prudent steps we can, and we really don't anticipate major problems elsewhere.

MR. BACON: Let's just do Brian over here and then the next -- (off mike).

DR. HAMRE: Okay. And I owe one over here.

QKen, one here. One here.

QDr. Hamre, somewhat related -- you talked about the millennial fervor or fever. What's the Pentagon's view of the possibility of terrorist attacks during New Year's, a couple dates there, military facilities overseas? What do you say about that?

DR. HAMRE: Of course we are continually watching and under surveillance. Every one of our installations every place around the world is given guidance for preparation for terrorist activities. It varies depending on world events, calendars, you know, historic dates that come up, et cetera, and there is definitely concern that we have that there might be terrorist activity at this time of the year. You know by other reporting that there are -- there were some preparations that were made. I think we're on top of that. I certainly can't predict that we can stop it, you know. But we see that it's potentially there. But I want you to know it's been a very active focus, and all of the nation's instruments that monitor for this are tuned to it. And I think that we've done very prudent and appropriate cautionary steps.

QA question about your confidence in the Russian system. If we only spent $10 million, and that's been in the form, it sounds, like a check, writing a check to the Russians to ensure that their early warning systems and their command and control are secure, do we have independent verification that their assurances are accurate? And are you not at all concerned that -- I mean, here is a demoralized bunch of folks with a deteriorating early warning system, and you seem so overly confident.

DR. HAMRE: Well, again, the funds we have spent have been to help augment their plans and supplement their work for the stockpile controls, things of that nature. Remember, Russia is a society and a military establishment that has placed enormous premium on positive control of the forces from the central leadership. We know this from the way we've studied them over the years. We know in theory how their systems work, and we know a fair amount about some of the details. And when they tell us that there is no chance that their radar systems are all of a sudden going to plot trajectories of incoming ICBMs, we believe them. We can't imagine how that would happen, knowing what we know about them, as well.

You know, they have been genuinely apprehensive about letting us in to the inner workings of their command and control systems. I understand that. We would have the same reticence to let them come in and look at our command and control systems. So a lot of our confidence is based on what they tell us and the way it confirms what we know through our normal assessment methods.

MR. BACON: John?

DR. HAMRE: I really do owe him this question --

QThis is typically a time of year when sailors, airmen around the world get liberal leave, whether in this country, or as I say around the world. Are there places that you can tell us about where you have told commanders, "Keep your people on the base, get your sailors on the ship, don't let folks out"?

DR. HAMRE: I am not aware that we have done that at any specific place.

Bob, do you?

ADM. WILLARD: No, sir, we haven't. What we have done, the secretary has established various posture levels, related to the year 2000 vulnerability periods, that our forces are to recognize and respond to. Those posture levels determine exactly things like that; how many people should be on hand; how self-sufficient the unit must be at a given time, and the starting posture levels -- as we enter into the year 2000 vulnerability periods -- are alert, but folks are more on a tether than they are in place.

QKen?

Q (Inaudible.)

QOne of the burdens of your life -- I remember going back to your days as comptroller --

DR. HAMRE: (Inaudible.)

Q-- was the multiplicity of different computer languages in the systems daily used. Some of them were really quite antique. And I wondered whether that's been a problem, the multiplicity of different languages, some of them antique -- if you can talk about that.

And secondly, I noticed that one of the charts, I think, mentioned that you have been retiring systems. I wonder if you have taken advantage of this Y2K to make any -- clean out some of these kludged-up old systems?

DR. HAMRE: Not nearly to the degree I wish we had. We still operate a lot of very old systems. You know, I think we have brought people back out of retirement, you know, to work on some of them.

I think about 15 percent -- just vague recollection -- about 15 percent of the systems we chose to retire, rather than to remediate. But we are still operating lots of old, antiquated computer systems, I am sad to say.

And I think it was just a year ago we actually moved one of those old punch-card readers -- you know? -- from one place to another to support a depot. And just, oh, God, it breaks my heart to think we did that. But again, it was one of those painful decisions that you had to give to the field to say, "What's the most effective way to sustain your operations and make sure you can function on the 2nd of January?" And we did not replace nearly as many as I wish we had.

MR. BACON: The last two questions, Steve and Jack.

QI have got -- (inaudible).

MR. BACON: That's it.

QIf I could just ask one question? You mentioned positive control of the Russians a couple of times. Are you willing to make the same kind of statement about the Indians and the Pakistanis? Do they -- are you pretty confident they're going to know what each other is doing and not be in a situation where they'd be nervous about what the other country is doing?

DR. HAMRE: I don't personally have the same depth of knowledge of Pakistan and India as I do of Russia. That's hardly historical -- a lot of personal training and interest. And so I can't give you absolutely the same ironclad. But that more reflects my limitations, not what we at the department know. I would just have to get back to you and see if there's anything more specific that I could give you to reassure you.

We've had conversations with virtually all the militaries to try to make sure that people don't misinterpret. But, you know, they're on the knife's edge all the time, looking at each other. And so is there something that's instantly going to happen that night that's going to make them more apprehensive? I doubt it, you know, personally.

QIs there anybody up there that has a little more --

MR. VERGA: I was just going to say, India and Pakistan are not dependent on the missile warning systems to the degree, for example, that the U.S. and Russia are. And that was one of the reasons why there's no program that's equivalent to that. The only two nations that have sophisticated early warning systems are Russia and the United States, which is why we have the Y2K center is limited to those. I would echo what Dr. Hamre says. The information that's going to be available to India and Pakistan at midnight is not overly dependent upon computer-based systems; therefore we(sic) [don't] think that it might fail and give false information.

QWell, while -- excuse me. While I've got you, could I just ask you're still (dickering ?) around over the number of Russians who are going to be -- approximately how many Russians there are going to be and approximately how many U.S. officers will be in --

MR. VERGA: There will be 18 or 20 Russians, and an equivalent number of Americans to man the shifts at the center.

QAnd in Moscow.

ADM. WILLARD: No. This is Center For Year 2000 Strategic Stability at Peterson Air Force Base in Colorado.

QNow, are there going to be any U.S. officers?

MR. VERGA: The Russians have invited a couple of observers and technicians into their communications centers to help them operate the contingency communications equipment that we've put in place. It's one or two.

QWhen you say you have stood up a Y2K cell, is that five people, a hundred people, a thousand people? I mean, what -- do you expect (a little thing?) here?

DR. HAMRE: I think it's probably in the neighborhood of 10-12 --

QYou have max strength, so it's --

DR. HAMRE: Yeah -- yeah, there's a dozen people. Because again, the -- all we're doing is we're simply augmenting the existing, you know, watch systems and monitoring systems. We told people, don't invent any new (sic) [arrangements] for Y2K, you know? We shouldn't have a problem here we're going to confront that we wouldn't normally confront. And so it's simply additive for the extra liaison activity.

ADM. WILLARD (?): In the back for the last one.

QThanks. You testified earlier this year to Congress that you'd like to see the Center for Strategic Stability opened up to other countries. Why didn't that happen?

DR. HAMRE: Because we really mainly had this concern associated with Russia and felt that that was a premium. No one else had that immediate need the way that we did with them. And so we focused our efforts to get them on board. And, of course, it was a hard year, because all of our discussions with them just stopped during the Kosovo operations, and it's taken a while to rebuild some confidence between each other in order to land this. So we've placed our emphasis only on that.

ADM. WILLARD: Thank you very much.

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